The Board of Finance held a regular meeting on Monday, May 11, 2009 in the meeting room at Town Hall South, 3 Main Street, Newtown, CT. Chairman John Kortze called the meeting to order at 7:30 p.m.
PRESENT: John Kortze, James Gaston, Martin Gersten, Joseph Kearney, Harry Waterbury and Michael Portnoy
ALSO PRESENT: First Selectman Joseph Borst, Finance Director Robert Tait, three members of the public and one member of the press.
VOTER PARTICIPATION: Ruby Johnson, 16 Chestnut Hill Road spoke about the refunding of bonds and suggested that the Town tells the public what the improvement bonds bought. Finance Director Robert Tait reported that the information is on the website. She also asked the Board of Finance to assist the Selectmen in becoming ADA compliant as far as hearing and visual impairments.
Mr. Kortze explained that these specific items fall under the Selectmen purview.
LeReine Frampton, 6 Pebble Road noted there is a state insurance bill pending that would be applicable to the town, the Board of Education, non-profits and small businesses. Can we use this as a way of paying less of a percentage?
Bob Merola, 22 Ashford Lane stated that he works part time for the United Way and is impressed with the process they use on raising and allocating money. The agencies have to describe their program, have to demonstrate metrics and how well their programs are doing. He suggested Newtown seek advice and guidance and speak to someone at the Untied Way as to the process they go through. Many of the charitable organizations funded by Newtown are also funded by United Way.
COMMUNICATIONS: Mr. Kortze received an e-mail from John Voket of the Newtown Bee. A Waterbury judge ruled that the Connecticut Resources Recovery Authority (CRRA) breached its contract with the local governments and gained “unjust enrichment” by raising its garbage disposal fees. (Att. A). He asked First Selectman Borst to look into this. Mr. Kortze noted that the press is sometimes taken to task for what may or may not be accurate. He receives regular emails from people at the Bee and the News Times, as a courtesy, that are often helpful and have a positive result.
Mr. Kortze reported he had received a letter from the Director of Business at the Board of Education, Ron Bienkowski taking issue with his comments about the electricity savings that was realized the day after the Council voted. Mr. Kortze has not received an adequate answer as to why the percentages were out of whack. The explanation, during the budget deliberations was that it had to do with credits that would not to be realized. Mr. Bienkowski forwarded his backup about potential savings. The back up took place during the deliberations. There were clearly conversations about the potential savings in the back up that was given to Mr. Kortze. Mr. Kortze apologized if he offended Mr. Bienkowski but the questions remain unanswered and are suspect in their timing.
ACCEPTANCE OF MINTUES: Upon motion of Mr. Gaston, the meeting minutes of 4/13/09 were unanimously accepted as presented.
FIRST SELECTMAN REPORT: First Selectman Borst reported that a letter was sent to the Office of Policy Management regarding the Tech Park grant. $250,000 was used; the town is requesting the $250,000 balance be transfer to Fairfield Hills for infrastructure work.
Mr. Kortze was approached by Pop Warner inquiring about improvements to Taylor Field. The Town Attorney is looking into who technically owns Taylor Field. People want to donate money. Mr. Tait noted there is a donation fund that can be specific to Taylor Field.
FINANCE DIRECTOR REPORT: Spoke about OPEB (Other Post Employment Benefits), retiree medical benefits. (Att. B). The town is currently paying for seven retirees.
Mr. Gaston answered Mr. Gerstens questions regarding the rebidding of the high school and the scope of the job by saying the Public Building & Site Commission oversees the project. First Selectman Borst explained that the $1.1 million difference between the approved amount and the bid amount will be put in an undesignated account under the supervision of the First Selectman and the Finance Director. Morganti’s guaranteed maximum price was accepted.
UNFINISHED BUSINESS: none noted.
NEW BUSINESS:
Discussion and possible action:
Budget process as it relates to charitable organizations: Mr. Kearney moved the Board of Selectman come up with a formalized process as it relates to charitable organization in conjunction with the town financial director to be reviewed by the Board of Finance. Mr. Gersten seconded. All in favor. Mr. Kearney would like the charitable organizations to show what all member towns pay.
Current proposed budget status: Mr. Gersten moved the clerk request, from the Board of Education, the adjustments that are being made to their budget. Mr. Gaston seconded. All in favor. Dr. Robinson has offered to email or come to a meeting to update the Board on the high school as it moves forward.
Mr. Gaston asked if the Board should be doing due diligence or review, as is done with the Board of Education and the Town, with respect to Fairfield Hills. Should we request a monthly itemization? Mr. Kortze answered that he is going to ask Bob Geckle to report at the next meeting.
First Selectman Borst reported that Glen Mountain Holding has asked for a thirty day extension, to July 31st.
Add to 2008/2009 CIP: Mr. Gersten moved to add to the 2008/2009 CIP renovations to the Alexandria Room and ADA requirements for handicap door openers at the Edmond Town Hall and the Senior Center. Seconded by Mr. Gaston. All in favor. Mr. Tait reported the Alexandria Room is $26,000, the Edmond Town Hall handicap door openers is $10,000 and the Senior Center door openers are in the Public Works building maintenance budget for this year.
Refunding bonds: Mr. Tait reported that the refunding of the bonds saved $710,000, most of that will be put in the 2011/2012 fiscal year to help offset the increase debt burden of the high school. $105,000 will help in unknowns: unemployment, medical and debt service next year. Morgan Keegan is the company that helped to sell the bond issue. They not only look at the interest rate for the bonds that will be created but the interest that can be earned on the escrow funds. The savings is in principal and interest, the “wiggle room” is the $105,000 next year and there is an amount in debt service. The “lions share” of the savings is predetermined in 2011/2012. (Att. C)
Pension: Mr. Gaston reported on the meeting with the Pension Committee saying that the Board of Finance and the Pension Committee have different roles. The Board of Finance looks at the shorter term, while the Pension committee is concerned with the long term, 13, 15, 17 years. After the presentation Mr. Gaston still believes $250,000 should be added to the pension. Mr. Kearney noted the pension committee relies on advice of the actuary and the pension advisors. He suggested moving toward a formal ratification of the advisors and come out with a request for proposal. Mr. Portnoy questioned the time period to smooth losses believing that the time period should be shortened to amortize gains or losses. We are behind in meeting our assumptions. The pension committee will
discuss whether or not more money should be put in at their next meeting and make a recommendation to the Board of Selectmen and the Board of Finance. Mr. Kortze asked how we know we are doing well with the pension. If we have been trying to get 8% and we’ve been getting 4% we are headed in the wrong direction and our guidelines and investment policy parameters may not be consistent with the current market place. How has the pension committee done compared to peer groups? When was the plan put out to bid last? Mr. Kortze would like to revisit this issue at the next meeting. Mr. Tait stated the purchasing policy says you don’t have to RFP except for architects and engineers. Mr. Kearney said nobody on the Board of Finance has a problem with Westport Resources. Mr. Portnoy noted that the pension was overfunded at the start of the economic cycle. Mr. Kortze told the Board to email questions to him and copy the clerk.
ANNOUNCEMENTS: none noted.
ADJOURNMENT: Having no further business, the meeting was adjourned at 9:02 p.m.
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Susan Marcinek, Clerk
Att A: email re: CRRA
Att. B: OPEB handout
Att. C: refunding
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